I have found a double bottom on the daily chart of AUD/JPY. The pair went past the neckline at around 90.00. Fundamentally speaking, due to the improved Chinese manufacturing PMI figure, Aussies retreated from their positions. Additionally, the RBA’s decision of keeping the rates unchanged and other actions reflected its position of not reducing the rates for this year.
The release of Australian GDP has gone according to the market’s expectation. As a result, a strong upward rally began for AUD/JPY and I placed a long order at 90.50, which was fulfilled shortly. As the double bottom amount to about 250 pips, my profit target will be the same. My stop loss was placed at 150 pips below, which was half of the pair’s average weekly range.
My trade was open for 6 days until I wanted to reduce my risks as FOMC statement was coming. In the meantime, I sold half of my position as the pair reached the major psychological level of 93.00. Now, I decided to collect the remaining profits from the market. As the market could go to any direction depending on the Fed’s declarations, I did not want to take any chances.
During the London session, I closed the other half at 92.50. I made a total of 225 pips from this trade, not bad at all! Once the FOMC statements come out, I will watch the market condition and look for potential entry points. Any break of previous highs should be analyzed carefully.